The eyes are on the giants, but the little guys are taking a beating, too. As the casino world has been turned inside out and upside down, the story for the smaller firms has turned from one of ambitious growth, to one of survival. Small casino chains like Century Casinos, Monarch, and Golden Entertainment have been caught flatfooted by this pandemic response and are now staring into an ominous hourglass. How long can they last with severe limitations on capacity and only temporary forbearance on their rent payments? It’s not a prospect that most investors want to even think about, but it will now be very difficult or perhaps even impossible for smaller casinos to borrow much more to stay afloat, given the stress that lenders are currently experiencing.

Century, Monarch, and Golden Entertainment all took the financial equivalent of a very deep breath when it became clear that the global economy was going under water in March. They drew down their loan facilities before any lines of credit got cut off. Except this time it wasn’t for the sake of growing the top line by acquiring assets expanding offerings. It was for staying afloat as long as possible under impossible business conditions. So it is now a game of who can hold their breath the longest until conditions return to something resembling normalcy.

Still, even if all restrictions on casinos are suddenly lifted tomorrow, nobody has any idea what happens next or how long it will take for the venues to be filled to capacity once again. It is true that along with the rest of the market, the smaller casino stocks have recovered strongly since bottoming, they can only hold their breaths for so long.

Century, Between a Rock and a Hard Place